Imagine that, fifty-eight years from now, a loaf of bread cost $30,000.
The promise of this kind of hyperinflation would be enough for you to cry for your future kin who would be saddled with such a burden.
In 276 AD, the wheels were coming off of the Roman Empire and religious persecution was increasing. In the empire’s Egyptian province, prices were beginning what would be a seemingly infinite spiral into inflation.
In one of the best examples of well-preserved historical pricing records, we know that a measure of wheat cost about 200 drachmae in this year. By 334 AD, just fifty-eight short years later, that same measure of wheat would cost 2 MILLION drachmae – a 10,000-fold increase.
Yet when you do the math, that alarming increase in prices over just two modern-day generations works out to only 17.2% annually.
While those numbers are pretty bad, they pale in comparison to some of the world’s foremost examples of hyperinflation.
You don’t have to look as far as Zimbabwe and their ten trillion dollar banknote to find such examples. One of them was right smack in…
The United States.
During the Revolutionary War, the Continental Congress created a paper currency called Continental Currency. Until then, the colonies had issued their own fiat currencies, each less valuable than the British pound.
Each colonial government got to devalue it as they saw fit, hoping and praying that they could tax the citizenry enough to get the fiat money back and retire it. Adam Smith called this a “fraudulent scheme“.
At the same time, the Spanish dollar – perhaps the first modern-day world currency – had been circulating in the U.S. as well. Somehow, this hodge-podge system of using precious metals, various fiat currencies, international currencies, and even beaver pelts as currency hummed along for some time.
But the newly convened Continental Congress, leaders of a forthcoming nation during it’s revolution, saw fit to step in and issue its own currency.
Only it issued way too much.
Within a few years, the stuff wasn’t worth but pennies on the dollar. It’s not that the people lost confidence in them; it’s that the government screwed up.
By November 1779, Continental Currency had a monthly inflation rate of 47%. Quite simply, it put the ancient Roman drachma to shame.
That measure of wheat that increased ten thousand-fold over several decades was nothing compared to what the new American republic managed to do with their own experiment in few enough years to count on one hand.
One could make the excuse that the colonies still issued their own money alongside Continentals. Or that the British counterfeited a bunch of the new fiat currency and dumped it on American shores. Or you could accept that imperfect governments can’t solve the same problems that plagued their counterparts in the ancient world.
Fortunately, this experiment gone wrong prompted the Constitutional Convention to include a gold and silver clause in the new United States Constitution. Lesson learned… for awhile.
By the time the Civil War rolled around, the government was up to its usual tricks. Inflation was once again a hot topic. Those who harkened to the days of Continental Currency were called traitors and threatened with hanging.
Sound anything like today’s government branding of alternative currency promoters as “domestic terrorists“?
The same playbook being used to destroy Bitcoin, Liberty Dollar, and anything else – even gold and silver – is the same playbook used to bankrupt every man, woman, and child in the last currency crisis. Count on it.
One doesn’t need look to nations on the verge of collapse to find harrowing tales of hyperinflation. Even the world’s “best” governments have fallen victim to their own arrogance and practically bankrupted their own people.
It seems governments and those who conspire with them spend more time working to hide evidence of their incompetence rather than fix the problem. They’re like the criminals who are so smart you can’t help but suggest they’d make more money if they just went legit.
Rather than put an end to their washing the world in lots of easy money, they and their crony corporate friends sit around making the size of cereal boxes smaller, hoping you won’t notice your money just became more worthless.
The problems created by their arrogance and greed haven’t gone away. They’ve just covered them up better.
And they’ve gotten the whole world on board with the scam so that now, the only victims of that “fraudulent scheme” decried by Adam Smith are the suckers who believe today’s government is so much wiser than than one from yesterday.
Latest posts by Andrew Henderson (see all)
- Banking in tax-free Vanuatu - August 19, 2017
- My Experience Opening a Bank Account in Ukraine - August 11, 2017
- 15 countries with the highest tax rates in the world - August 7, 2017